A Summer Internship Project Report on

PERCEPTION OF CUSTOMER TOWARDS MUTUAL

FUNDS

(Reliance Mutual Fund)

MASTER OF BUSINESS ADMINISTRATION

By

PRAVEEN KUMAR SINGH

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 CHAPTER I
INTRODUCTION

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1.1 INTRODUCTION

Mutual fund is a type of professionally managed collective investment vehicle that pools
money from many investors to purchase securities who shares a common financial goal.
The money thus collected is then invested in capital market instruments such as shares,
debentures & other securities. The income earned through these investments and the
capital appreciation realized is shared by its unit holder in proportion to the no. of units
owned by them. Thus, a mutual fund is the most suitable investment for a common man
as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at relatively low cost.

Mutual funds invest in three broad classes of financial assets

Stocks: Equity related instruments.

Bonds: Debt instruments that have a maturity of more than one year.

Cash: Debt instruments that have a maturity of less than one year. For e.g. T-bills,
Commercial papers etc.

1.2 Depending on the assets mix MFs schemes are classified into three broad categories

a. Equity schemes:

This scheme invest there bulk of the corpus 85-95 per cent in equity shares or equity
linked instruments and the balance in cash. Following are the types of equity schemes

Diversified equity schemes: These schemes invest broadly into diversified

portfolio of equity stocks.. Typically such schemes have 20-50 stocks form wide
range of industries. For e.g. Reliance Vision fund, etc.
Index Schemes: These schemes invest its corpus in a basket of equity stocks that
comprises a given stock market index such that S&P nifty index, with each stock
being assigned a weightage equal to what it has in the index as a result index
scheme appreciates or depreciates relatively to the Index.
Sectoral Schemes: A sectoral scheme invests its corpus in the equity stocks of a
given sector such a power, telecommunication, automobile etc. For e.g. Reliance
Pharma funds

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 Tax planning Schemes: Also known as ELSS (Equity linked Saving Schemes)
are open to individuals. Subject to such condition & limitation, as prescribed
under section 80 C of Income Tax Act and subscription to these schemes can be
deducted before computing taxable income. For e.g. Reliance Tax saver (ELSS)
fund.
Arbitrage funds: Arbitrage funds invest in the securities or any other financial
instrument which can be simultaneous purchased and sold at different prices in
different prices and different forms, this difference in price is the profit that the
investor earns Arbitrage exists as a result of market inefficiencies; it provides a
mechanism to ensure that the prices do not deviate substantially from fair value
for long periods of time.

b. Hybrid Schemes

Hybrid schemes, also referred to as balanced schemes, invests in a mix of equity and
debt instruments, A hybrid schemes may be equity oriented, debt oriented or variable
Assets allocation schemes.

Equity- oriented: These schemes may consist of equity of approx. 60 per cent
of the portfolio & the balance in the debt instruments.
Debt oriented schemes: The most popular debt oriented schemes in India are
Monthly Income plan which typically constitute 85-90 per cent of the debt
component typically bonds.
Variable asset allocation schemes. In this scheme the proportion of equity &
debt is often varied on the basis of some of the objective criterion. The
allocation to equity increases when the market falls and decreases when the
market rises wherein the allocation to debt decreases when market falls &
increases when market rises.

c. Debt Schemes

Debt schemes invest in debt instruments Vis. Bonds & Cash.

Gilt schemes: Government securities schemes invest only in government

bonds i.e. 80-85 per cent of the corpus will be invested in it & remaining

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 in cash. These schemes may have varying maturity Short-term, medium
term or long term.
Mixed debt schemes: Mixed debt schemes invest 30-40 per cent of corpus
in government bond; 40-55 per cent is invested in corporate Bonds 7 the
balance is invested in cash.
Floating Rate Debt schemes: Floating rate debt schemes invests in a
portfolio comprising substantially of floating rate debt bonds, fixed rate
bonds swapped for the floating rate returns & cash.
Cash Schemes: Also known as liquid schemes, invests primarily in money
market instruments like T-bill, Commercial paper, certificate of deposit &
deposit wit bank. They also invest in short term bonds. The average
portfolio maturity of such schemes less than 150days. Presently cash
schemes accounts for the largest share of the mutual funds in India.

Depending upon the structure mutual funds are divided into three categories

Open Ended schemes: An open ended scheme offers units for sale without
specifying any duration for redemption. It remains open (always) to accept money
from investors and have an obligation to return money back to the investors. Such
a scheme does not have any fixed maturity and is meant to be carried on till it is
closed down under any of the rules of the regulations. This gives investors the
flexibility to enter or exit from the scheme based on their individual needs. Some
unit-holders may exit from the scheme, wholly or partly, but this does not affect
the continuity of the scheme and it continues operations with the remaining
investors.

Close Ended Schemes: These are schemes launched by mutual fund houses,
wherein, one can invest only during the new fund offer period. Once this is over,
one cannot invest. These schemes can have a debt or equity mandate. Also, they
have a pre-specified maturity period or a lock-in, after which the scheme may
either become open-ended or wind up its operations and return the investment to
the investors, calculated in accordance with the net asset value (NAV) on the
maturity date. However, the second option is rarely exercised for equity close-

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 ended schemes. These schemes are listed on either the BSE or the NSE after
the NFO period ends. The NAV is generally disclosed on a weekly basis. The
fund manager can manage the investment better because the corpus fund is
available for the entire duration of the scheme and he is not required to maintain
the liquidity to take care of redemption.

Interval Schemes: Interval schemes combine the benefits of open end and closed
end schemes. These essentially are closed end funds, but become open ended at
pre specified intervals by opening for sale and repurchase on a regular basis at
intervals on pre-specified dates. Investors can buy or sell the units of these
schemes at an interval which is specified in the schemes document. For example,
in case of a Monthly Interval Fund, investors can buy or sell the units every month
on the specified dates. The units cannot be bought or sold on other dates. This
means the scheme is open end only on the specified transaction date and is like a
closed end fund on other dates.

1.3 KEY CONCEPT

NAV: Net Asset Value is the market value of the schemes minus its liabilities.
The per unit NAV is the net asset value of the scheme divided by the number of
units outstanding on the valuation date. According to SEBI, MFs are required to
publish there NAV at least twice in a leading newspaper.

NAV calculation:

Assets = Market Value of the funds investments + Receivables + Accrued Income

Debts = Liabilities + Accrued Expenses.

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 SIP: Systematic Investment Plan (SIP) is an option where a fixed amount is
invested in a mutual fund scheme at regular intervals. For example, invest 1,000
in a mutual fund every month. It is a disciplined investment plan and helps reduce
propensity to market fluctuations. It is a convenient tool that helps to preserve
capital and also render significant wealth creation in the long-run. SIP investments
takes advantage of rupee cost averaging.

Fig.1: Systematic Investment Plan

Bank Mutual
TRANSFER Accoun Fund Monthly
One Way
t

Sources: Own data

STP: In Systematic Transfer Plan, all money is invested in a mutual fund in Debt
(Equity) schemes and units are sold every month and it invested into another
mutual fund schemes i.e. Equity (Debt).There are two types of STP: Fixed and
Capital appreciation. In Fixed plan means a fixed sum will be transferred to the
target mutual funds, on the other hand in Capital Appreciation, only the amount of
capital which is appreciated gets transferred, that was the original lump sum
amount invested in the start is protected. Capital Appreciation choice is only with
3

Fig.2: Systematic Investment Plan

Debt Both Ways Equity

Mutual Mutual
Fund Fund

Sources: Own data

SWP: If investor redeems units in mutual funds every month and get it deposited
in your Bank accounts, its called SWP (systematic Withdrawal Plan) , which is
recommended to liquidate mutual funds corpus.

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 Figure3: Process of STP

Sources: AMFI

Rupee Cost Averaging: Rupee Cost Averaging is an effective mechanism which

helps in eliminating the need to time the market. Under this method, one need not
be concerned about when and how much to invest. A fixed sum of money can be
invested regularly and over time it averages out the costs. Say, one
invests 1,000 a month, and, the price of the selected mutual fund scheme unit
is 10 in the first month, you will get 100 units. In the next month, if the unit
price falls to 9, you are allotted 111 units. In the third month, if the price drops
further to 8, it can get you 125 units. Thus, by investing 3,000 over three
months, you will get 336 units. On the other hand, if the entire amount was
invested in the first month itself, you would have gained just 300 units. In case of
SIPs, the average unit cost is about 8.9 as compared to 10 in case of lump sum
investments. Thus, SIPs help lower the average unit cost and can buy you more
units.

Expenses Ratio: The on-going expense of the mutual fund represented by the
expenses ratio or management expense ratio (MER). The expense ratio includes
the cost of hiring the fund manager also known as management fee, this cost is
between 0.5-1.0 per cent of the assets on average. The others are administrative
cost which includes expenses such as postage, record keeping, customer services
etc, expenses towards paying brokerage commissions & towards advertising &

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 promotion of the fund. On the whole the expenses ratio ranges from 0.2% to as
high as 2.0 per cent. The average equity fund charges around 1.3%-1.5%.

1.4 ORGANISATIONAL STRUCTURE

The below given diagram illustrates the various entities involved & organisational setup
of mutual funds.

Figure 4: Organisation of Mutual Funds

Sources: AMFI India

Sponsors: A sponsor is an entity that sets up the mutual fund. Sponsor sets up a mutual
fund to earn money by doing fund management. Largely, a sponsor can be compared with
a promoter of a company. Sponsor does the following important activities:

Sponsor creates a Public Trust under Indian Trust Act, 1882 (this trust becomes
the mutual fund)

Sponsor appoints trustees to manage the trust with the approval of SEBI.

Sponsor creates an Asset Management Company under Companies Act, 1956,

which will act as the Investment Manager for the Mutual Fund. Sponsor applies
and registers the trust as a Mutual Fund with SEBI.

Sponsor applies and registers the trust as a Mutual Fund with SEBI.

For e.g. Sponsor of Reliance mutual fund is Reliance capital Limited.

Mutual fund: The mutual fund is constituted as a trust under the Indian trust Act, 1881 &
registered with SEBI & beneficiaries of the trust are the investors.

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Trustees: The trustee is a notional entity that cannot contract in its own name. so the trust
enters into contracts in the name of the trustees. Appointed by the sponsor, the trustees
can be either individuals or a corporate body (a trustee company). For e.g. trustee of
reliance mutual fund is Reliance capital trustee co. limited.

Asset Management Company: The Asset Management Company(AMC), also referredto

as the investment manager, is a separate company appointed by the trustees to run the
mutual fund. Reliance Capital Asset Management company has been appointed as the
Asset Management Company [AMC] of Reliance Mutual Fund by the Trustees of
Reliance Mutual Fund.

Custodian: The custodian handles the investments back office operations of a mutual
fund. It looks after the receipt & delivery of securities, collection of income, distribution
of Dividend. The sponsors cant act as a custodian.

Registrars transfer Agents: It handles investor related service such as issuing units,
redeeming units, sending fact sheets, annual repots & so on. Reliance Capital Asset
Management Limited has appointed M/s. Karvy Computershare Pvt. Limited to act
as the Registrar and Transfer Agent to the Schemes of Reliance Mutual Fund.

1.5 Advantages of Mutual Funds

Convenience & Fair pricing: Mutual funds are common and easy to buy. They typically
have low minimum investments) and they are traded only once per day at the closing net
asset value (NAV). This eliminates price fluctuation throughout the day and various
arbitrage opportunities that day traders practice.

Diversification: The pool of money collected in a mutual fund scheme is invested in

various securities. Individual investors can scarcely achieve such diversification on their
own leading to reduced risk.

Professional management: When investment are done in mutual funds, the investors are
relieved of the chores associated with managing investments on their own because it is
managed by professionals who decide when to buy & when to sell. Their decision is

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supported by investment research and analysis, whereas the the individual investor many
lack in expertise.

Liquidity: Units & shares of the funds can be traded in secondary market or sold back at
notified repurchase price.

Well regulated: Investment to mutual funds is regulated by SEBI.

Assured allotment: Investors are assured of firm allotment when they apply for the units
or shares of mutual funds, investment is a subject to limit under tax-saving schemes.

Tax advantage: Investment to mutual funds is tax-exempt i.e. they do not need to pay tax
either on interest income or capital gain (both short term- long term). Dividend distributed
by mutual funds is tax-exempt In the hands to recipient.

Transparency: It is the most transparent financial intermediary as the investor is aware

of investment objective, its asset allocation pattern, its portfolio composition, NAV etc.
Its periodical performance can be easily tracked.

Small Investments: An individual can participate in a mutual fund schemes even if they
want to make a small investment wherein the most of the schemes are having a minimum
investment between 1000-5000.

Disadvantages: The investor has to bear an entry/exit load, expenses of running a

mutual fund.

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 CHAPTER II
COMPANY PROFILE

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COMPANY PROFILE
Reliance Mutual Fund ('RMF'/ 'Mutual Fund') is one of Indias leading Mutual Funds,
with Average Assets Under Management (AAUM) of Rs. 1,03,542 Crores (Jan to Mar
'14Quarter) and 55.08 Lakh folios. (31st Mar 14)

Reliance Mutual Fund, a part of the Reliance Group, is one of the fastest growing mutual
funds in India. RMF offers investors a well-rounded portfolio of products to meet varying
investor requirements and has presence in 179 cities across the country. Reliance Mutual
Fund constantly endeavors to launch innovative products and customer service initiatives
to increase value to investors. Reliance Capital Asset Management Limited (RCAM) is
the asset manager of Reliance Mutual Fund. RCAM is a subsidiary of Reliance Capital
Limited (RCL). Presently, RCL holds 65.23% of its total issued and paid-up equity share
capital and the balance of its issued and paid up equity share capital is held by other
shareholders which includes Nippon Life Insurance Company (NLI), holding 26% of
RCAMs total issued and paid up equity share capital. NLI acquired the said 26%
shareholding in RCAM on August 17,2012.

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial
services companies, and ranks among the top 3 private sector financial services and
banking companies, in terms of net worth. Reliance Capital Ltd. has interests in asset
management, life and general insurance, private equity and proprietary investments, stock
broking and other financial services.

Reliance Mutual Fund

Sponsors Reliance capital Limited
Trustee Reliance capital Trustee Co. Limited
Reliance Capital Asset Management
Investment Manager /AMC
Limited
The Sponsor, the Trustee & the Investment
Statutory Detail Manager are incorporated under the
companies Act, 1956

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 CHAPTER III
RESEARCH
METHODOLOGY

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3.1 INTRODUCTION

The expectation of investor plays a vital role in the financial markets determining price of
the securities, the volume traded & various other financial operation in actual practice.
These expectation of investors are influenced by their perception of how the fund
should perform and human generally relate perception to action. The evidence of
prevalence of such psychology state is seen among mutual fund investors in India. For the
investors who do not have the time & expertise to analyse and invest in stocks and bonds,
mutual fund offers a viable investment alternative to them. This is because mutual funds
provide the benefit of cheap access to expensive stocks along with the professional
management. Mutual fund diversifies the risk of the investor by investing in a basket of
assets. A team of professional fund manager manages them with in-depth research input
from investment analysts. Being institutions with good bargaining power in markets,
mutual fund have access to crucial corporate information which individual investors
cannot access. But even though the mutual fund Industry came into being in 1963 an
initiative of Govt. of India & RBI with the formation of Unit Trust of India the industry
still lacks the participation of retail investors & is very less compared to others investors.
So the present study has taken up to know the perception of retail investor about the
mutual funds & what the factors are that influences the investment decision making.

3.2 STATEMENT OF THE PROBLEM

The mutual fund industry still lacks the participation of retail investor when compared to
other investment schemes even though the industry manages the portfolio of investment
by professionals & offer benefits like diversification etc.

3.3 OBJECTIVES OF THE STUDY

To know about the perception of investors towards mutual funds

To know about the factors preferred by the investors while investing in mutual
funds

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3.4 SOURCES OF DATA

Two types of data were taken into consideration i.e. Primary data and Secondary data.
Primary Data: Direct collection of data by personal interviewing and survey.
Secondary Data: Indirect collection of data from sources containing past and
recent information like Reliance mutual fund brochures, Annual publications,
Books, Journals, Newspapers, Company manuals etc.

RESEARCH INSTRUMENTS
A close ended questionnaire was conducted for my survey. Questionnaire
consisting of a set of questions made to be filled by various respondents.

SAMPLING PLAN
Sampling Unit: Bangalore city.
Sample size: The sample consists of 102 respondents. The sample was drawn
from walk in customers of Reliance Mutual Fund Ltd. The selection of the
respondents was done on simple random sampling method. Respondent includes
Businessmen, IT professionals & other prospective investors.
Data collection Method: Interview & Telephony survey

3.5 LIMITATIONS

1. Sample size was limited to 102 because of limited time which is small to represent the
whole population.

2. The research was limited to Bangalore city only and if the same research would have
been carried in another city, the results may vary.

3. Sometimes the respondents because of their business didnt able to concentrate while
filling up the questions. However the researcher tried there level best to overcome the
limitation by explaining the importance of research.

4. The study has a limitation of not being undertaken over an extended period of time
market ups & downs which have a significant influence over investor perception.

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 CHAPTER IV
INDUSTRY OVERVIEW

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4.1 MUTUAL FUND HISTORY:

The mutual fund Industry was an initiative of Govt. of India & RBI and came into
being in 1963 with the formation of Unit Trust of India. The MFs history in India is
broadly divided into four phases:

First phase: 1964-1987

Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and organizational
control of the Reserve Bank of India & later on 1978 UTI was de-linked from the RBI
and the Industrial Development Bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by Unit Trust of India
was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under
management.

Second Phase: 1987-1993 (Entry of Public sector funds)

In 1987 public sector mutual funds were set up by public sector banks, LIC & GIC
(General insurance corporation) SBI Mutual Fund was the first non-UTI Mutual Fund
established in June 1987 followed by Canara bank Mutual Fund in Dec 1987, Punjab
National Bank Mutual Fund in Aug 1989, Indian Bank Mutual Fund in Nov 1989, Bank
of India in Jun 1990, Bank of Baroda Mutual Fund in Oct 1992. LIC established its
mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

Third phase: 1993-2003 (Entry of Private sector funds)

The Indian investors got a wider choice of investment with entry of private sector fund in
the year 1993 and in the same year the first Mutual Fund Regulation came in to being,
under which all MFs were registered & governed excluding UTI. The Kothari pioneer
now merged with Franklin Templeton was the first private sector mutual fund registered
in year 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996 and later on Mutual funds in India

18
functioned under the SEBI (Mutual Fund) Regulations 1996. With increasing mutual fund
houses, many foreign mutual funds were setting up funds in India and also the industry
has witnessed several mergers and acquisitions. As at the end of January 2003, there were
33 mutual funds with total assets of Rs. 1,21,805 crores & in 2014 the number has
increased to 44. The Unit Trust of India with Rs. 44,541 crores of assets under
management was way ahead of other mutual funds.

Fourth Phase: Since February 2003

In February 2013, the Unit trust of India Act 1963 was separated into two entities. One is
the specified undertaking of the Unit Trust of India representing broadly, the assets of US
64 schemes, assured return & certain other schemes with the AUM of Rs.29,835 crores as
at the end of the January 2003 a7 functioning under the rules framed by the Govt. of India
& doesnt come under Mutual Fund Regulations.

The second UTI Mutual Funds, sponsored by State Bank of India, Punjab National Bank,
Bank of Baroda & Life Insurance Corporation of India, registered with SEBI and
functioning under the purview of Mutual Funds Regulation.

Figure 5: Growth in AUM

Sources: AMFI

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4.2 The Indian Mutual fund industry is one of the fastest growing & one of the most
competitive segments in BFSI sector. From a single player monopoly market in 1964,the
Indian mutual fund industry has evolved into a high growth and competitive market
supported by a favourable economic & demographic factors such increase in income,
financial literacy etc. As of 2013, there are 45 assets management companies operating in
India & the total asset under management (AUM) stood at Rs.7.66 trillion. However, after
several years of consistent growth, with peak year were early 2000 the growth rate of the
AMCs have come down from the peak level & the industry witness a consistent decline
of 6.3% & 5.1% in its AUM during FY11 & FY12 resp. The decline in AUM could be a
result of many factors such uncertainty in economic conditions, change in regulatory
guidelines- No entry load, guidelines on transaction charges stringent KYC norms,
tightening evaluation & advertising norms, which came into being in a very small
duration, lack of healthy participation from a large part of country.

Amidst volatility & uncertainty in the market, Indian mutual fund (in terms of Average
asset under management) has shown growth rate of 23% for the year ended March 2013
which was higher compared to 12% growth rate in year ended March 2012. The industry
has a CAGR of 18% from FY 2009-2013. Average Asset under management stood at
INR 8,140 billion as of September 2013 which showed an increase & was INR 8,800
billion as of December 2013.

Figure 6: Growth in Average AUM

Sources: AMFI

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Indian mutual fund industry has evolved over the years & though it has grown at a CAGR
of 15% from FY07-FY13, the growth performance in the recent year has been rather
passive.

Indias AUM penetration as a per cent of GDP is between 5-6 per cent, while its 77 per
cent for U.S, 31 per cent for South Africa. The Indian MF industry is highly concentrated.
There are 44 AMCs operating in India but approx. 80per cent of AUM is concentrated
with the 8 leading players.

Figure 7: Market share of leading mutual funds (Basis AUM)

Sales
2% others
4%
4%
5% 20% HDFC mutual Fund
5%
Reliance mutual fund
7%
13%
ICICI prudential Mutual Fund
9%

12% Birla Sun life Mutual fund

9%
10%
UTI Mutual Fund

Sources: AMFI, Date as of September 2013

AUM structure by Investor segment

Figure 8: AUM composition (Investor segment)

Investor Segment

Corporates
2
20
Banks/Fis

FIIs
49
High Networth
28 Individual
Retail

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Sources: AMFI, Date as September 2013
Investment in mutual funds constitutes corporates, Banks & financial Institutions, FIIs,
HNIs & retail investors. Corporates investment constitute around 49% of Asset under
management and mainly focuses on debt/money market funds with an objective of short-
term returns & liquidity management. HNIs has emerged as the fastest growing amongst
the investor segment which constitutes around 28% and has grown at the rate of 20%
(approx.) over the period of FY 10 FY13with the preference for the debt oriented funds.
Retails share of AUM is 20% which is growing at a lower rate in the absence of mutual
fund awareness & lower distribution reach.

Indian stock markets have experienced inconsistent return in the recent past. Higher
inflation & inconsistent economic growth has worried the retail investor whose main
objective is to get good return with less amount of risk. In such scenario, the investor
diverted their funds from the equity market to liquid/money market & debt AUM. The
equity-debt mix is determined largely by the performance of the capital markets &
interest rate cycles. AUMs in debt & liquid money market have seen an increase in FY14
due to anticipation of RBI rate cuts and desire for investors to seek a fixed return. Debt
oriented products with a maturity period of less than 3 years have gained most transaction
in terms of absolute net new money, with an increase in asset under management of INR
1,000 billion indicating clear shift in investor interest from equity in recent times. Gold
ETFs has grown at an extremely fast pace over the last few years due to popularity of
gold as an investment.
Figure9: AUM composition by Product category

100%

90%
25% 22%
80% 33% 31%
70% Gold ETFs
60% Balanced

50% Equity oriented

57%
40% 57% Debt oriented
50% 50%
Gilt
30%
Liquid/ Money Market
20%

10% 16%
13% 14% 13%
0%
FY11 FY12 FY13 Sep-13

Sources: AMFI, Date as of September 2013

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Geographical Distribution

The mutual funds industry is yet to spread its reach beyond Tier I cities & is highly
concentrated in top 5 cities in India i.e. Mumbai, Delhi, Bangalore, Chennai & Kolkata
which contributes 74% (approx.) as of September 2013 whereas top 35 cities contribute
90-92 per cent of the industry AUM. One of the prime focuses of the industry is focussing
on developing the penetration ratio & increasing its presence in Tier II & Tier III cities.

Figure 10: AUM Geographical Distribution

March 2013
3%

5%
6%
Top 5 cities
13% Next 10 cities
Next 20 cities
Next 75 cities
74% Other cities

Sources: AMFI

Key policy announcements in union budget 2013

As a part of the budget speech, the Finance Minister announced the following:
Introduction of a dedicated debt segment on the stock exchange on which debt
mutual fund schemes can be traded.
Mutual fund distributors to be allowed as members in the mutual fund segment of
the stock exchange.
Pension funds and provident funds to be permitted to invest in exchange traded
funds, debt mutual funds and asset backed securities.

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Emergence of Investment advisor

In the recent few years from abolishing entry loads on mutual funds to a host of other
measures, SEBI has been looking at increasing regulation with a view to improve the
investment climate. Recently, SEBI has announced a new series of regulations governing
investment advisors. The regulation was made with the intent of ensuring the regulation
of individuals, firms and corporations providing investment advice to investors & was
aimed at drawing a distinction between agents and advisers who provide financial advice
to the investor for a fee but will not seek a commission from the AMC for directing
investors toward investing in a particular scheme/plan. This regulation was also
undertaken to ensure that the advisory functions of investment companies will not be
motivated by the desire to earn distributor commissions or commissions from product
manufacturers leading to a potential conflict of interest. SEBI currently has permitted
only 11 investment advisers have received licenses.

Key challenges:

Investor mentality
India is still a relatively under penetrated market when it comes to paying for
financial advice. Most investors are not comfortable paying a fee when it comes to
receiving financial advice and even more so in years where the market sees
greater volatility and when there may be potential losses on investments. In the
past, HNIs who have the knowledge and wherewithal to appoint someone to
manage their finances have paid for advice. However, in the mass affluent
segment, paying for advice still remains a relatively nascent concept.
Lack of investor awareness
As opposed to developed markets, financial awareness and literacy of the average
Indian investor is relatively low. Given the propensity of the Indian investor to
prefer savings in physical form like real estate, housing and gold, investments in
MF instruments are relatively low compared to these other instruments. MF
instruments constituted ~3% of Indian financial assets as opposed to gold and real
estate which contributed ~46% of financial assets. Increasing awareness to
promote MF investment will remain a key challenge9.

24
 Blurred lines between the adviser and distributor
While SEBI has tried to draw a line between advisers and distributors, there may
still be some potential grey areas. Advisers can still earn commissions and their
investors may not be aware of the same. Furthermore, distributors also provide
informal advice to investors, while still receiving commissions from product
manufacturers which are not in line with the regulations by SEBI.

However, regulations can largely help ensure that financial advisers who will be charging
a fee for their services will look at recommending direct schemes/plans of the AMCs
which have demonstrated a consistent track record of fund performance and have strong
brand equity in the market. Given that they would look at investor retention and the
increasing share of the wallet, investment advisers may not be incentivised to favour any
particular product and may look at the interest of the investor.

Key challenges to MFs Industry

Lack of financial education and awareness

Investors need to be made aware of their financial goals and the means to achieve
the same. AMFI & SEBI along with the industry are making efforts for investors
awareness campaign. Fund houses are also mandated by regulation to invest 2 per
cent from the scheme expenses towards, investor awareness campaign.
Limited distribution Network
Distribution of the products to the smaller cities in absence of quality distribution
infrastructure is a key issue. Fund houses needs infrastructure like branches,
adequate number of relationship managers & sales service staff in these locations
to be able to increase their sales volume coming from these demographics.
Distribution Cost
Cost of establishing a distribution network in B-15 cities is quite high. It is cost
per transaction or the low sales volume that makes it economically challenging.
Cultural bias towards physical assets.
As of FY13, 46% of the total individual wealth in India is invested in physical
assets (Gold & Real estates) whereas contribution to MFs in the asset portfolio is
very low. Insurance products constitute 17% of the individual savings in the
financial assets, whereas the share of MFs is much lower than 3.2 %.

25
 CHAPTER V
DATA ANALYSIS
AND
INTERPRETATION

26
1. Gender

Gender

Cumulative
Frequency Percent Valid Percent Percent
Valid Male 75 73.5 73.5 73.5

Fe Male 27 26.5 26.5 100.0

Total 102 100.0 100.0

Findings: The table shows that 73.5% investors in Mutual Fund are Males and only
26.5% investors are females.

Interpretations: The table interprets that males are more likely to invest in mutual funds
than women.

2. Age
A
Frequency Percent Valid Percent Cumulative
Percent
1.00 30 29.4 29.4 29.4
2.00 56 54.9 54.9 84.3
Valid 3.00 13 12.7 12.7 97.1
4.00 3 2.9 2.9 100.0
Total 102 100.0 100.0

Findings: The above table shows that 30(29.4%) number of respondent are below the age
of 30, 56(54%) are between age of 30-40, 13(12.7%) are between 40-50 & 3(2.9%) are
above 50.

Interpretation: It can be seen majority of the population investing in mutual funds are
from age group 30-40.

27
3. Occupation
C
Frequency Percent Valid Percent Cumulative
Percent
1.00 4 3.9 3.9 3.9
2.00 80 78.4 78.4 82.4
3.00 12 11.8 11.8 94.1
Valid
4.00 4 3.9 3.9 98.0
5.00 2 2.0 2.0 100.0
Total 102 100.0 100.0

Findings: The table shows that around 78.4% of investors in Mutual funds are private
employees and 12% are Govt. employees where in students, retired & other together
constitutes 10%.

Interpretations: The valid percentage shows that employees working in private sector
are more interested in investing in Mutual funds.

4. Annual Income
D
Frequency Percent Valid Percent Cumulative
Percent
1.00 5 4.9 4.9 4.9
2.00 25 24.5 24.5 29.4
Valid 3.00 53 52.0 52.0 81.4
4.00 19 18.6 18.6 100.0
Total 102 100.0 100.0

Findings: The table shows that around 52% of respondents falls under income category
of 5-10 lac and 24.5% falls in the category of 2-5lac

Interpretations: This shows that the income parameter is not a valid reason to say
employee invest in Mutual funds, since majority of the population earning around 5-10
lac invest in funds, whereas only small percentage (18%) Earning 10 lac and above are
interested in investing.

28
5. Annual Saving

E
Frequency Percent Valid Percent Cumulative
Percent
1.00 20 19.6 19.6 19.6
2.00 57 55.9 55.9 75.5
Valid 3.00 22 21.6 21.6 97.1
4.00 3 2.9 2.9 100.0
Total 102 100.0 100.0

Findings: The table shows that around 55.9% of respondent falls under the saving
category of and 50,000-2,00,000 and 21.6% has savings of 2,00,000-5,00,000 and 19.6%
of the investors has savings less than 50,000.

Interpretations: The majority of the population (60%) was able to make a maximum
saving of in the range of 50,000- 2, 00,000 subsequently the income range of majority of
respondents falls in the range of 5-10 lac.

6. Annual Income & savings

Correlations
Annual Income Annual saving
Pearson Correlation 1 .668**
D Sig. (2-tailed) .000
N 102 102
**
Pearson Correlation .668 1
E Sig. (2-tailed) .000
N 102 102
**. Correlation is significant at the 0.01 level (2-tailed).

D: Annual Income E: Annual Savings

29
Findings: The Correlation table shows that people with higher salary are having higher
savings where the correlation between income and saving is coming up to .7. It shows
that both the variables are highly correlated.

Interpretations: There is a strong relationship between the two variables i.e changes in
annual income is strongly correlated with changes in the annual saving. Here Pearsons r
is 0.668. This number is close to 1.

7. Which age group prefers to invest more in mutual funds?

newI
A Frequency Percent Valid Percent Cumulative
Percent
Unfavourable 17 56.7 56.7 56.7
B30 Valid Favourable 13 43.3 43.3 100.0
Total 30 100.0 100.0
Unfavourable 16 28.6 28.6 28.6
3040 Valid Favourable 40 71.4 71.4 100.0
Total 56 100.0 100.0
Unfavourable 3 23.1 23.1 23.1
4050 Valid Favourable 10 76.9 76.9 100.0
Total 13 100.0 100.0
Unfavourable 2 66.7 66.7 66.7
50a Valid Favourable 1 33.3 33.3 100.0
Total 3 100.0 100.0

Findings: For the above analysis the response of investors were favourable (highly
favourable, favourable) & unfavourable (somewhat favourable, not very favourable & not
at all favourable) from the age group of below 30, 30-40, 40-50 & 50& above.

Interpretation: The above output shows that the age group of 40-50 with 76.9% prefers
mutual fund the most.

30
8. Which range of savings results more as investment in mutual fund?

Statistics
newI
Valid 20
1.00 N
Missing 0
Valid 57
2.00 N
Missing 0
Valid 22
3.00 N
Missing 0
Valid 3
4.00 N
Missing 0

Findings: The table shows that around 55.9% of respondent falls under the saving
category of and 50,000-2,00,000 and 21.6% has savings of 2,00,000-5,00,000 and 19.6%
of the investors has savings less than 50,000.

Interpretations: The majority of the population (60%) was able to make a maximum
saving of in the range of 50,000- 2, 00,000 subsequently the income range of majority of
respondents falls in the range of 5-10 lac.

newI
E Frequency Percent Valid Percent Cumulative
Percent
Unfavourable 11 55.0 55.0 55.0
1.00 Valid Favourable 9 45.0 45.0 100.0
Total 20 100.0 100.0
Unfavourable 20 35.1 35.1 35.1
2.00 Valid Favourable 37 64.9 64.9 100.0
Total 57 100.0 100.0
Unfavourable 6 27.3 27.3 27.3
3.00 Valid Favourable 16 72.7 72.7 100.0
Total 22 100.0 100.0
Unfavourable 1 33.3 33.3 33.3
4.00 Valid Favourable 2 66.7 66.7 100.0
Total 3 100.0 100.0

31
1= Less than 50000 2=50,000-200000 3= 2,00,000-5,00,000

4= 5,00,000 & above.

Findings: The above table shows, from the 20 respondent which had savings less than
50,000 amongst them 55% favours the mutual fund & 45% doesnt favours the mutual
fund. Similarly investors having a savings between 50,000 to 2,00,000, amongst them
35.1% doesnt favours & 64.9 favours the mutual fund. Investors having savings between
2,00,000 to 5,00,000 , amongst them 23.3% doesnt favours while 72.2% favourable
attitude towards mutual fund. Investor with saving is 5,00,000 & above has the 66.7%
favourable attitude towards investment in Mutual funds.

Interpretation: Investor with more amount of saving has a higher percentage of

favourable attitudes towards investment in Mutual fund. Here the investor with savings
between 2,00,000 5,00,000 has highest favourable attitude towards investment.

32
9. Regression

Variables Entered/Removeda
Model Variables Variables Method
Entered Removed
S, P, M, R, Q,
1 . Enter
N, L, Ob
a. Dependent Variable: I
b. All requested variables entered.

I: Mutual Fund

L: Safety M: Liquidity N: Flexibility O: Good Return

P:Professional Management Q:Tax Benefit R: Diversification S:Lock-In
period

Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 .507a .257 .128 .91098
a. Predictors: (Constant), S, P, M, R, Q, N, L, O

ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 13.207 8 1.651 1.989 .069b
1 Residual 38.175 46 .830
Total 51.382 54
a. Dependent Variable: I
b. Predictors: (Constant), S, P, M, R, Q, N, L, O

33
 Coefficientsa
Model Unstandardized Standardized T Sig. 95.0% Confidence
Coefficients Coefficients Interval for B
B Std. Beta Lower Upper
Error Bound Bound
(Constant) 3.520 .684 5.144 .000 2.142 4.897
L .132 .137 .255 .967 .338 -.143 .408
M -.121 .182 -.199 -.666 509 -.488 .245
N .435 .228 .454 1.903 .063 -.025 .895
1 O .014 .225 .017 .061 .952 -.439 .466
P -.030 .223 -.027 -.134 .894 -.478 .418
Q .010 .217 .010 .046 .963 -.427 .447
R -.261 .203 -.251 -1.288 .204 -.669 .147
S -.153 .113 -.206 -1.357 .181 -.380 .074
a. Dependent Variable: I

Interpretation: The above output table shows that flexibility has significance level less
than .05.

Findings: The above table shows that flexibility is considered as an important factor that
influences the perception of investor to invest in Mutual fund.

34
10. Which factors affect the selection of the mutual fund scheme?

Variables Entered/Removeda
Model Variables Variables Method
Entered Removed
AA, T, V, X, Y,
1 . Enter
W, U, Zb
a. Dependent Variable: I
b. All requested variables entered.

I: Mutual Fund
T: Minimal initial investment U: Fund performance V: Funds Reputation
W: Schemes portfolio of investment X: Entry & Exit Load Y: Disclosure of the
information, periodic report & valuation
Z: NAV Disclosure AA: Tax Benefits

Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 .435a .189 .120 .77169
a. Predictors: (Constant), AA, T, V, X, Y, W, U, Z

ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 12.941 8 1.618 2.716 .010b
1 Residual 55.383 93 .596
Total 68.324 101
a. Dependent Variable: I
b. Predictors: (Constant), AA, T, V, X, Y, W, U, Z

35
 Coefficientsa
Model Unstandardized Standard t Sig. 95.0% Confidence
Coefficients ized Interval for B
Coeffici
ents
B Std. Error Beta Lower Upper
Bound Bound
(Constant) 2.095 1.101 1.902 .060 -.092 4.283
T -.075 .133 -.063 -.565 .573 -.340 .190
U .281 .140 .241 2.012 .047 .004 .559
V .127 .122 .103 1.042 .300 -.115 .370
1W .196 .124 .196 1.572 .119 -.052 .443
X -.159 .144 -.114 -1.103 .273 -.444 .127
Y -.023 .115 -.022 -.198 .843 -.251 .205
Z .082 .097 .105 .852 .396 -.110 .275
AA -.045 .085 -.056 -.527 .599 -.214 .124
a. Dependent Variable: I

Interpretation: Fund performance has significance level is .047 which is less than .05
and thus is the significant factor.

Findings: Fund performance is perceived to be the most important factor for the selection
of the scheme.

36
11. Logistic Regression

Classification Tablea,b
Observed Predicted
AGE Percentage
1.00 2.00 Correct

1.00 41 0 100.0
GENDER
Step 0 2.00 13 0 .0
Overall Percentage 75.9
a. Constant is included in the model.
b. The cut value is .500

Variables not in the Equation

Score df Sig.
L 1.925 1 .165
M 1.402 1 .236
N .002 1 .968
O .441 1 .507
P .612 1 .434
Q .784 1 .376
R 4.127 1 .042
S 4.016 1 .045
Variables
Step 0 T 2.663 1 .103
U .502 1 .479
V .003 1 .959
W 2.849 1 .091
X 1.455 1 .228
Y .102 1 .750
Z .710 1 .400
AA .473 1 .492
Overall Statistics 18.923 16 .273

37
 Omnibus Tests of Model Coefficients
Chi-square df Sig.
Step 25.318 16 .064
Step 1 Block 25.318 16 .064
Model 25.318 16 .064

Interpretation: The significance of omnibus model is more than .05 & the model is fit.

Model Summary
Step -2 Log likelihood Cox & Snell R Nagelkerke R
Square Square
a
1 34.291 .374 .560
a. Estimation terminated at iteration number 8 because parameter
estimates changed by less than .001.

Interpretation: The value of Nagelkerke R square is greater than .5. This shows that the
sample can be projected as population.

Classification Tablea
Observed Predicted
AGE Percentage
1.00 2.00 Correct

1.00 39 2 95.1
AGE
Step 1 2.00 6 7 53.8
Overall Percentage 85.2
a. The cut value is .500

38
 Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Q .602 .631 .913 1 .339 1.827
R -.004 .490 .000 1 .993 .996
S -.028 .330 .007 1 .933 .973
W -.952 .526 3.277 1 .070 .386
Y -.069 .472 .021 1 .884 .934
L -.955 .517 3.405 1 .065 .385
M .524 .520 1.015 1 .314 1.688
N .432 .717 .362 1 .547 1.540
Step 1a O -.487 .525 .863 1 .353 .614
P .051 .515 .010 1 .921 1.052
T -1.307 .659 3.932 1 .047 .271
U 1.019 .648 2.473 1 .116 2.770
V 1.467 .625 5.518 1 .019 4.336
X .383 .611 .393 1 .531 1.467
Z .371 .505 .539 1 .463 1.449
AA .435 .506 .740 1 .390 1.545
Constant -6.717 5.552 1.464 1 .226 .001
a. Variable(s) entered on step 1: Q, R, S, W, Y, L, M, N, O, P, T, U, V, X, Z, AA.

Interpretation: The above table can be inferred as factors perceived by females are
diversification benefits (R) 13.731 than male, Fund reputation(V) 4.336 times the male,
Lock-in-period (S) is 7.308 times than male, schemes portfolio of investment(w)
.386times the male consider it as an important factor.

Findings: In order to influence the women investors the AMCs should be conserving the
following factors as important

Diversification Benefits
Fund Reputation
Lock-in Period
Schemes portfolio of investment.

39
12. Factor analysis:

Descriptive Statistics
Mean Std. Deviation Analysis N
L 3.8824 1.66081 102
M 3.7451 1.42597 102
N 3.7647 1.12731 102
O 3.7255 1.16174 102
P 3.2843 .77559 102
Q 3.6176 .90153 102
R 3.8529 1.05678 102
S 4.4020 1.11923 102

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .786
Approx. Chi-Square 474.396
Bartlett's Test of Sphericity Df 28
Sig. .000

Interpretation: Bartlett's test is another indication of the strength of the relationship

among variables. This tests the null hypothesis that the correlation matrix is an identity
matrix. An identity matrix is a matrix in which all of the diagonal elements are 1 and all
off diagonal elements are 0, the Bartlett's test of sphericity is significant. That is, its
associated probability is less than 0.05. In fact, it is actually 0.000. This means that
correlation matrix is not an identity matrix.

The approx.. chi-square statistic from the KMO & bartletts Test is 474.395 with 28
degree of freedom, which is significant at .ooo levels. The KMO statistic (0.786) is
greater than .05. Hence factor analysis is considered as an appropriate technique for
further analysis of data.

Findings: The total number of variables consideration for the mutual fund related
analysis includes eight. Bartletts test of sphericity & Kaiser-Meyber Olkin(KMO)

40
measure of sampling adequacy were used to examine the appropriateness of factor
analysis.

Communalities
Initial Extraction
L 1.000 .767
M 1.000 .771
N 1.000 .850
O 1.000 .710
P 1.000 .535
Q 1.000 .557
R 1.000 .464
S 1.000 .704
Extraction Method: Principal
Component Analysis.

Interpretation: The next item from the output is a table of communalities which shows
how much of the variance in the variables has been accounted for by the extracted factors.
For instance 85 % of the variance in flexibility is accounted for while 77.71% of the
variance in liquidity is accounted for.

Total Variance Explained

Compon Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared
ent Loadings Loadings
Total % of Cumulativ Total % of Cumulat Total % of Cumul
Varianc e% Variance ive % Variance ative
e %
1 4.281 53.517 53.517 4.281 53.517 53.517 4.281 53.516 53.516
2 1.077 13.464 66.981 1.077 13.464 66.981 1.077 13.466 66.981
3 .881 11.008 77.989
4 .674 8.419 86.408
5 .509 6.368 92.776
6 .309 3.857 96.633
7 .149 1.865 98.498
8 .120 1.502 100.000
Extraction Method: Principal Component Analysis.

41
Interpretation: In the analysis we retain only those components with eigen values
greater than1. From the above table, it can be noted that there are two factors with eigen
value greater than one. The percentage of value explained by component 1 & component
2 are 53.516% & 66.981% respectively.

The scree plot is a graph of the eigen values against all the factors. The graph is useful
to determine number of factors to be retained. The point of interest is where the curve
starts to flatten. It can be seen that the curve begins to flatten after factor two.
Therefore only two factors have been retained.

Component Matrixa
Component
1 2
L .868 -.119
M .878 -.001
N .901 .196
O .842 .041
P .389 -.619
Q .745 -.045
R .678 -.066
S .267 .796
Extraction Method: Principal
Component Analysis.

42
 a. 2 components extracted.
Factor score for the 1st factor: .868*X1 + .878*X2 + .901*N +.842 *O + .389*P +
.745*Q +.678*R + .267*S
Factor score for the 2nd factor: -.119*X1 + -.001*X2 + .196*N +.041 *O + -.619*P
+ -.045*Q +-.066*R + .796*S

Rotated Component Matrixa

Component
1 2
L .867 -.124
M .878 -.006
N .902 .191
O .842 .036
P .385 -.621
Q .745 -.049
R .677 -.070
S .272 .794
Extraction Method: Principal
Component Analysis.
Rotation Method: Varimax with
Kaiser Normalization.
a. Rotation converged in 3
iterations.

Interpretation: It can be inferred that principal component is explained by safety(L),

Liquidity(M),Flexibility (N), Good Return (O), Professional management (P), Tax benefit
(Q), Diversification (R) and principal component 2 is Lock-in period (S).

43
 CHAPTER VI
Leanings, FINDINGS,
CONCLUSION AND
SUGGESTIONS

44
Learning
Factors that consumer perceives to be important while investing in mutual funds.
How to conduct survey through personal interviews.
How mutual fund could be beneficial for the customers.
Various factors which plays a significant role in selecting mutual funds as an
investment avenue & also in selection of schemes.
The awareness of customer about mutual funds.
The importance of communication skill in corporate.

45
FINDINGS

1. It is observed that 86% of investors are interested to invest their money in open ended
funds the reason can be attributed to its convenience to enter and exit at any time & 14%
investors preferred to invest in close ended funds because they are long term investors as
well as they want some tax benefits.

2. Amongst all other investment avenues like FDs, Equity, Debt & mutual funds,
investors preferred FDs the most.

3. On an average 55% of the investors will keep investing in mutual funds for 1-3 years.

4. The safety, liquidity& flexibility are the important factors which are to be the important
while considering Mutual funds as investing avenue.

5. Fund performance is perceived to be the important factor while selecting the scheme.

6. The majority of the population (60%) was able to make a maximum saving of in the
range of 50,000- 2, 00,000 subsequently the income range of majority of respondents falls
in the range of 5-10 lac.

7. Investor with more amount of saving has a higher percentage of favourable attitudes
towards investment in Mutual fund. Here the investor with savings between 2,00,000
5,00,000 has highest favourable attitude towards investment.

46
CONCLUSION

Mutual funds are good source of returns for majority of households and it is particularly
useful for the people who are looking for less risky investment. However, average
investors are still restricting their choices to conventional options like gold and fixed
deposits when the market is flooded with countless investment opportunities, with mutual
funds. This is because of lack of information about how mutual funds work, which makes
many investors doubtful towards mutual fund investments. In fact, many a times, people
investing in mutual funds too are unclear about how they function and how one can
manage them. So the organizations which are offering mutual funds have to provide
complete information to the prospective investors relating to mutual funds.

The government also has to take some measures to encourage people to invest in mutual
funds. Government prescribed a common format for all mutual funds schemes to disclose
their portfolios at half-yearly intervals. MFs are required to disclose various types of
instruments and percentage of investment in each scrip to the total NAV. It is believed
that these measures could lift the confidence of investor towards mutual fund industry
which has been crippled for years.

47
SUGGESTION
1. More number of open-ended schemes should be brought into market by the companies
due to focus of investor towards liquidity.

2. Many investors are still restricting their choices to the non-governmental options like
gold and fixed deposits even the market is flooded with countless investment
opportunities. This is because of lack of awareness about mutual funds which makes
many investors restrict their choice to traditional options like gold and fixed deposits. So,
awareness relating to mutual funds must be increased among the investors to encourage
them to invest in mutual funds.

3. AMCs should be transparent as possible and follow the norms stipulated by the
regulatory authority & AMFI in order to gain confidence of investors and thus build the
image in the market. Hence, disclosure of investment objectives & announcement of
NAV on every trading day it should be focused upon.

4. Multiple promotional programs on TV and radios even in regional languages could

help in creating better connect and industry awareness, Social media can also emerge as a
channel to create awareness about mutual fund products and to help establish better
connect specially with youth & Continued provisions of district adoption programs and
multi-city radio campaigns by AMFI.

5. Provide complete information relating to mutual funds: Even among the investors who
invest in mutual funds are unclear about how they function and how to manage them. So,
proper information must be provided to the investors in order to increase the loyalty
among the investors. Increased use of online tools to help in providing sales literature,
grievance redressal, carrying out routine transactions and allowing for easy
switches/redemption between multiple mutual fund instruments.

6. Investors fee must be reduced by reducing paper work: Investors fee includes
management fee, distribution fee, and administrative costs, etc., which are generally
deducted from the asset value. This can be possible if the investment is made without
agent and if the paper work is reduced.

7. While educating/providing information to the investor the companies should keep the
factor which is revealed in the study which is not perceived to the investor e.g.TAX
benefit, safety etc. should be focussed upon.

48
BIBLIOGRAPHY

49
Bibliography
(n.d.).

(n.d.). Retrieved may 18, 2014, from Reliance Mutual fund:

http://www.reliancemutual.com/Home.aspx

(1988). Retrieved May 16, 2014, from

http://www.sebi.gov.in/sebiweb/home/list/3/39/0/1/Mutual-Fund

(2013). Retrieved May 23, 2014, from http://www.amfiindia.com

AMFI. (2013, march 31). Mutual funds India. Retrieved 2014, from amfiindia:
http://www.amfiindia.com

Brown, F. K. (December 9, 2011). Investment Analysis and Portfolio Management. Cengage

Learning; 10 edition .

Business standard. (n.d.). Retrieved May 2014, from Retrieved from http://www.business-
standard.com/

chandra, p. (1995). Investment Game: How to Win - Includes the Finance Act 1995. New Delhi: T
M H.

chandra, P. (2011). Investment Analysis and Portfolio Management. McGraw-Hill.

50
Questionnaire

51
QUESTIONNAIRE

Consumer Awareness of Mutual funds

Name

Email

Age

o Below 30
o 30-40
o 40-50
o 50 & Above

Gender

o Male
o Female

Occupation

o Student
o Private employee
o Govt. employee
o Self-employed
o Retired
o others

Annual Income

o Below 2,00,000
o 2 lac-5lac

52
o 5 lac-10lac
o 10 lac & above

Annual saving

o Less than 50,000

o 50,000-2,00,000
o 2,00,000-5,00,000
o 5,00,000 & above

What is your attitude towards various investment avenues?

Highly Somewhat Not very Not at all

Favourable
favourable Favourable Favourable favourable

Fixed
deposit
Equity

Debt
Mutual
fund
How did you come to know about Mutual funds?

o Advertisements
o Friends
o Broker
o Others

What is the purpose for investing in Mutual funds?

o Wealth Generation
o Income generation
o capital appreciation
o Retirement planning

53
o others

Rate the following parameters which enables you to invest into mutual fund

1 2 3 4 5

Safety

Liquidity

Flexibility

Good return
Professional
Management
Tax Benefits
Diversification
benefits
Lock in period
Rate following attributes that affects your selection of Mutual funds &
specific schemes

Highly somewhat Not very Not at all

Important
Important important important important

Minima
initial
investment
Fund
performance
record
Funds
reputation
schemes
portfolio of
investment
Entry &

54
 Highly somewhat Not very Not at all
Important
Important important important important

Exit load
Disclosure
of
information,
periodic
report &
valuation
NAV
disclosure
TAX
benefits
On the basis of duration which plan do you prefer?

o Short term
o Ultra short term
o Long term

On an average how long you would keep investing in mutual fund?

o Less than 1 year

o 1-3 years
o 3-5 years
o More than 5 years

Which scheme would you prefer?

o Open ended
o Close ended

Being an investor, are you aware of various portfolios offered by Asset

management companies?

o Most

55
o Some
o Few
o None

Which of the following performance measure are you aware of?

o Return
o Standard deviation
o Ratios(Sharpe, Treynor, Jensen)
o None

Before investing into Mutual fund, where would you prefer to look for MFs
performance?

o Newspapers
o AMFI website
o Mutual funds websites
o others

Would you like to know more about mutual fund?

o Yes
o No

If not invested in mutual funds, What has been the reason?

o Lack of knowledge
o Find other investments better( FDs, Gold etc)
o Other reasons

56